January is the month when several things that are critical to members of the federal family increase.
White collar federal workers already know they will be getting a 1 percent pay raise in 2015. That’s the same amount they got this year, following a three-year pay freeze.
Federal and postal retirees, and their survivors, will learn in mid-October what their January 2015 cost-of-living adjustment will be. Earlier this year it was set at 1.9 percent. Then, that dropped to 1.8 percent. Because living costs were down slightly in August, according to the government, that 2015 retiree COLA now stands at 1.6 percent.
Federal and postal workers, and retirees, will also find out next month how much they will be paying for health insurance coverage under the Federal Employees Health Benefits program. That’s Uncle Sam’s in-house umbrella group of plans that covers nearly 9 million people.
If past experience means anything, some of the plans will go up. A few will go up a lot. Some will keep about the same premiums and a few, usually a very few, will actually reduce premiums. But, the bottom line is that for many people in some of the most popular plans, their 2015 health plan costs will exceed their 2015 pay raise.
When trying to guess what the coming year’s FEHBP premiums will do, some pros check out CalPERS. That’s the pension and health benefits program that covers 1.38 million active and retired California state employees. That’s the second largest employer- sponsored group health plan after the federal program itself.
In June, Business Insurance reported that premiums would go up an average of 3.27 percent in January. This year, the average CalPERS premium hike was 3 percent.
But averages can be misleading.
The Sacramento Bee newspaper, for example, said in June that 40 percent of policy-holders would see 2015 premiums decline if they stay in their current plans. But it also said that 570,000 members will see premium cuts of 3 percent, while another 175,000 will find their premiums going up by 3 percent or less. It said HMO Medicare members’ premiums will rise 5.9 percent, but Medicare PPO (preferred provider option) plans will go up 11.5 percent.
Again, the CalPERS numbers have no direct bearing on the FEHBP program. But, more often than not, they do point to where federal premiums may be heading.
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